Staff research

• Cashless Bank Branches in Canada

  Staff Analytical Note 2019-29 Walter Engert, Ben Fung

  Cashless or tellerless bank branches have proliferated in several countries in recent years. In a cashless bank branch, teller or counter services such as cash withdrawals, deposits and cheque-cashing are not available.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Bank notes, Digital currencies and fintech, Financial services JEL Code(s): E, E4, E41, E42, E5, E51
• October 31, 2019

  Research Update - October 2019

  This monthly newsletter features the latest research publications by Bank of Canada economists including external publications and working papers published on the Bank of Canada’s website.

  Content Type(s): Staff research, Research newsletters

• Borrowing Costs for Government of Canada Treasury Bills

  Staff Analytical Note 2019-28 Jabir Sandhu, Adrian Walton, Jessica Lee

  The cost of borrowing Government of Canada treasury bills (t-bills) in the repurchase (repo) market is mainly explained by the relationship between the parties involved. Some pairs of parties conduct most of their repos for t-bills rather than bonds, and at relatively high borrowing costs. We speculate that these pairs have formed a mutually beneficial service relationship in which one party consistently receives t-bills, while the other receives cash at a relatively cheap rate.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Financial markets JEL Code(s): G, G1, G10, G11, G12, G2, G20, G21, G23, G3, G32

• A Macroprudential Theory of Foreign Reserve Accumulation

  Staff Working Paper 2019-43 Fernando Arce, Julien Bengui, Javier Bianchi

  This paper proposes a theory of foreign reserves as macroprudential policy. We study an open-economy model of financial crises in which pecuniary externalities lead to overborrowing, and show that by accumulating international reserves, the government can achieve the constrained-efficient allocation.

  Content Type(s): Staff research, Staff working papers Topic(s): Balance of payments and components, Financial stability, Financial system regulation and policies, Foreign reserves management, International financial markets JEL Code(s): D, D5, D52, D6, D62, F, F3, F34

• Amazon Effects in Canadian Online Retail Firm-Product-Level Data

  Staff Working Paper 2019-42 Alex Chernoff

  I use firm-product-level data for Canadian online retailers to study how product scope (the average number of product categories per firm) evolved from 1999 to 2012. During this period, product scope dropped monotonically from 59 to 5 product categories.

  Content Type(s): Staff research, Staff working papers Topic(s): Firm dynamics, Service sector JEL Code(s): D, D2, D22, L, L1, L11, L8, L81

• Trade Flows and Exchange Rates: Importers, Exporters and Products

  Staff Working Paper 2019-41 Michael Devereux, Wei Dong, Ben Tomlin

  Using highly disaggregated transaction-level trade data, we document the importance of new firm-level trade partner relationships and the addition of new products to existing relationships in driving aggregate trade flows.

  Content Type(s): Staff research, Staff working papers Topic(s): Exchange rates, Firm dynamics, International topics JEL Code(s): F, F1, F4
• September 30, 2019

  Research Update - September 2019

  This monthly newsletter features the latest research publications by Bank of Canada economists including external publications and working papers published on the Bank of Canada’s website.

  Content Type(s): Staff research, Research newsletters

• The Economics of Cryptocurrencies—Bitcoin and Beyond

  Staff Working Paper 2019-40 Jonathan Chiu, Thorsten Koeppl

  Since the creation of Bitcoin in 2009, over 2,000 cryptocurrencies have been issued. We evaluate how well a cryptocurrency functions as a payment system.

  Content Type(s): Staff research, Staff working papers Topic(s): Digital currencies and fintech, Monetary policy, Payment clearing and settlement systems JEL Code(s): E, E4, E5, L, L5

• The BoC-BoE Sovereign Default Database: What’s New in 2019?

  Staff Working Paper 2019-39 David Beers, Patrisha de Leon-Manlagnit

  Until recently, few efforts have been made to systematically measure and aggregate the nominal value of the different types of sovereign government debt in default. To help fill this gap, the Bank of Canada (BoC) developed a comprehensive database of sovereign defaults that is posted on its website and updated in partnership with the Bank of England (BoE).

  Content Type(s): Staff research, Staff working papers Topic(s): Debt management, Development economics, Financial stability, International financial markets JEL Code(s): F, F3, F34, G, G1, G10, G14, G15

• What Does Structural Analysis of the External Finance Premium Say About Financial Frictions?

  Staff Working Paper 2019-38 Jelena Zivanovic

  I use a structural vector autoregression (SVAR) with sign restrictions to provide conditional evidence on the behavior of the US external finance premium (EFP). The results indicate that the excess bond premium, a proxy for the EFP, reacts countercyclically to supply and monetary policy shocks and procyclically to demand shocks.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Financial markets, Recent economic and financial developments JEL Code(s): E, E3, E32, E4, E44